Edward Robinson v Somers Isles Shipping Ltd

• Jurisdiction: Bermuda
• Judgment Date: 29 February 2008
• Date: 29 February 2008
• Docket Number: Civil Jurisdiction 2007 No. 275
• Court: Supreme Court (Bermuda)

In The Supreme Court of Bermuda

Kawaley, J

Civil Jurisdiction 2007 No. 275

BETWEEN:

Edward G Robinson

Plaintiff

and

Somers Isles Shipping Ltd

Defendant

Mr B Adamson for the Applicant/Defendant

Ms J Snelling for the Respondent/Plaintiff

The following cases were referred to in the judgment:

Pyrene Co Ltd v Scindia Navigation Co LtdWLR [1954] 2 WLR 1005

Anticosti Shipping Co v Viatur St-AmandUNK [1959] 1 Lloyds Rep 352

Hollingworth v Southern Ferries Ltd (The ‘Eagle’)UNK [1977] 2 Lloyds Rep 70

McCutcheon v David MacBrayne LtdUNK [1964] 1 All ER 430

Crooks v AllanELR (1879) 5 QBD 38

Import Export Metro v Compania Sudamericana de VaporesUNK [2003] 1 Lloyds Rep 405

Armour & Co, Ltd v Leopold Walford (London) LtdELR [1921] 3 KB 473

Bills of Lading Act 1863, s. 1

Breach of contract — Delivery of boat — Loss of cargo — Bill of lading — Whether shipper or consignee — Interlocutory stay application — Exclusive jurisdiction clause

RULING of Kawaley, J

Introductory

1. The Plaintiff is a Bermudian resident in Bermuda and the Defendant is a local shipping company. The Plaintiff seeks damages of $154,054 for breach of contract, plus interest, arising out of the failure of the Defendant to deliver a sport fishing vessel purchased by the Plaintiff. The Plaintiff's yacht was lost overboard the Defendant's vessel “Somers Isles” not far from the coast of Florida, where the cargo was loaded for carriage to Bermuda.

2. The Plaintiff issued a Specially Endorsed Writ on October 3, 2007. The Defendant purportedly entered a Conditional Appearance, without seeking leave, on October 29, 20071. By a Summons dated November 1, 2007, the Defendant applied for the action to be stayed and/or struck-out under Order 12 rule 8 on the grounds that it was brought in breach of an exclusive jurisdiction clause. The application for the matter to be transferred into the Commercial List was neither the subject of argument nor of the Consent Order made on November 21, 2007.

3. The present application raises, seemingly for the first time under Bermuda law2, the following key questions:

(a) was the Plaintiff merely a consignee, and not also the shipper. If so, can a consignee challenge the terms of a bill of lading?

(b) if the Plaintiff is entitled to challenge the terms of the bill of lading, either as shipper or consignee, was the exclusive jurisdiction clause incorporated by reference?

4. To the extent that these issues arise on an interlocutory stay application, I accept Mr. Adamson's submission that the Defendant need only establish a good arguable case that the exclusive jurisdiction clause is binding to give the Court jurisdiction to exercise its discretion to grant a stay.

The Evidence

5. The Defendant supported its application initially by the Affidavit of Geoffrey Frith sworn on October 31, 2007 in his capacity as President of the company which manages the Defendant. He explains that both he and the Defendant Company have been in the shipping business for some 20 years. The Defendant operates the vessel “Somers Isles”, which averages around 35 voyages per year, carrying containers and items which cannot be placed into containers (‘break bulk items’) from Florida to Bermuda. When a customer wishes to book a shipment, they or their broker or agent typically telephones the Defendant's agents in Florida, North Florida Shipping Inc., to make a booking. The Defendant's agents input the data into their computer system, which automatically generates a Bill of Lading. The latter document is usually sent to the shipper, by email, fax or mail, on the day the ship sails.

6. When the consignee wishes to collect his goods, Mr. Frith deposed, he will typically go to the Defendant's offices, settle any outstanding charges and receive a bill of lading and Delivery Order, which documents will be used to claim the cargo and clear it through Customs at the docks. At the bottom of the Bill of Lading is a reference to the standard terms and conditions under which the Defendant operates. The crucial clause provides in material part as follows:

‘RECEIVED, the above described cargo … The Carrier, shipper, consignee, owner of the cargo and holder of the bill of lading hereby agree that the goods shall be transported subject to the terms and conditions printed, typed, stamped or referred to in this document or in the Carrier's long form bill of lading or tariff or any service contract between the Carrier and the shipper, including the U.S. Carriage of Goods by Sea Act, 1936 or the Hague or Hague-Visby Rules if incorporated therein. Copies of such bill of lading and tariff are available from the Carrier or its agents …’

7. The deponent exhibits the Defendant's standard terms and conditions, clause 13 of which crucially provides as follows:

‘… The United States District Court for the Southern District of New York shall be the exclusive forum for adjudication of any claim against the Carrier arising out of or relating to this Bill of Lading.’

8. According to Mr. Frith, this exclusive jurisdiction clause is consistent with market practice in the shipping industry in Bermuda. The Bill of Lading itself limits liability to $500 unless a higher value for the goods is expressly stated. However, Mr. Frith states that shippers typically protect themselves against loss by purchasing insurance for the goods they are shipping to Bermuda. He stated that the Plaintiff was only the consignee and that the shipper was Northside Marine while the booking was made by Boat Max USA. The ship carrying the Plaintiff's cargo actually sailed on November 21, 2006, although scheduled to depart on November 17, 2006. The Plaintiff's cargo was swept overboard on November 22, 2006.

9. The Plaintiff's response to this Affidavit was sworn on November 29, 2007. He describes purchasing the boat in Fort Lauderdale in 2006 through a broker and travelling there to arrange repairs for the vessel, which he hoped to enter in the 2006 Christmas boat parade. He contacted Meyer Agencies, agents for the Defendant, and then called North Florida Shipping to arrange for them to collect his boat and ship it to Bermuda. He told the Defendant's agents the value of his boat when they asked him for this information prior to shipping. On or about November 20, 2006, he prepaid for the shipment and received a copy of the Bill of Lading which had the original shipping date of November 17, 2006 on it. When he learned the following day that the cargo would not be delivered, he immediately cancelled that cheque.

10. The Plaintiff further deposed that he found the exclusive jurisdiction clause surprising, was only partially insured for his loss and was having to pay off a loan for the purchase of the lost boat. Having regard to the fact that all parties concerned were based in Bermuda, he considered it unfair to have to sue in New York. The Plaintiff also deposed to the fact that a Bermuda surveyor investigated the loss of the cargo in Bermuda when the Defendant's ship arrived on November 24, 2006.

11. In his Second Affidavit, Mr. Frith points out that the Bill of Lading is governed by US law, that the cargo was lost off the coast of Florida and that the US District Court has specialist maritime experience. Robin Bishop, the manager of the Defendant's Florida agents North Florida Shipping Inc., swore an Affidavit on December 5, 2007 dealing with his booking records. He states that he took the booking initially from Jerry at Boat Max USA, and recorded him as the shipper ‘until I realized that he was booking it on behalf of Northside Marine’. He then recorded the latter entity as the shipper. He agrees that his office called the Plaintiff after the booking had been made to finalize certain details including the sale price because Northside Marine (who subsequently went out of business) could not be reached. He also stated that if an individual such as the Plaintiff had called to make a booking, mention would have been made of the need to prepare a bill of lading and an offer made to collate the documents for the customer for a small fee.

Legal findings: rights of parties to a contract for the carriage of goods by sea

12. Where A contracts with carrier or ship-owner B for goods to be shipped to C, from country D to country E, A is the shipper, B is the ship-owner and carrier and C is the consignee of the goods. However, where A contracts for goods to be shipped to himself, then A is both the shipper and the consignee. The terms of the contract of carriage will ordinarily be evidenced by a bill of lading, which may not be issued until after the goods have been loaded and the ship has sailed. These fundamental principles were essentially agreed.

13. The term ‘shipper’ is not defined in any of the materials placed before the Court, but clearly means the other party to a contract of carriage with the carrier. According to Article 1 of the Carriage of Goods by Sea Act 1926, which applies to the carriage of goods out of Bermuda:

‘“carrier” includes the owners or the charterer who enters into a contract of carriage with the shipper …’

14. “Scrutton on Charterparties and Bills of Lading”3 provides, in Article 33, as follows:

‘The bill of lading is not the contract, for that has been made before the bill of lading was signed and delivered, but it is excellent evidence of the terms of the contract, and in the hands of the indorsee is the only evidence. But it is open to the shipper to adduce oral evidence to show that the true terms of the contract are not those contained in the bill of lading, but are to be gathered from the mate's receipt, shipping-cards, placards, handbills announcing the sailing of the ship, advice notes, freight notes, or undertakings or warranties by the broker or other agent for the carrier.’

15. It seems clear from another text authority on which Mr. Adamson for the carrier relied, that in an ordinary commercial contract, the shipper and...